In an effort to revive slowing sales, Target has announced its entry into the paid membership arena with the launch of Target Circle 360. This new program will offer unlimited free same-day delivery in as little as an hour for orders over $35, along with free two-day shipping. The program will debut with a special offer of $49 per year for new members from April 7 through May 18. After that promotional period, the yearly fee will be $99. However, Target Circle credit card holders can sign up for the lower price at any time.

Target claims that its existing Target Circle program already has over 100 million members, who tend to shop and spend more than non-members. The introduction of this new paid membership program is just one of multiple key initiatives announced at Target's annual investors' meeting, all aimed at revitalizing sales and increasing foot traffic.

In addition to Target Circle 360, the company plans to refresh its stores and expand its successful store-owned brands, which combined generate an impressive $30 billion in sales. Furthermore, Target will construct more than 300 new stores over the next ten years.

These moves come as Target faces caution from consumers in regards to spending on discretionary items due to inflation, high borrowing costs, and credit card expenses. The retailer recently reported a 1.7% decline in annual sales, the first in seven years. However, the company did manage to surpass Wall Street expectations in its fourth-quarter profits, which witnessed a 58% increase. Target's lean inventory management and cost-cutting measures during the crucial holiday season contributed to this positive outcome.

While revenue slightly rose in the latest quarter compared to the previous year, Target experienced a decline in comparable sales of 4.4%. Although still significant, the decline in sales decelerated when compared to the third quarter's 4.9% drop and the second quarter's 5.4% decline.

Despite a cautious outlook on sales and profits, Target's shares soared by over 12% in afternoon trading following the investor meeting. Target's CEO, Brian Cornell, emphasized the company's commitment to gaining market share, stating, "We are going to be razor-focused on taking market share."

Compared to competitors like Walmart, Target is particularly vulnerable as more than half of its annual sales come from discretionary items such as fashion, toys, and electronics. Target has also faced setbacks of its own, struggling with inventory levels and heavy discounting to clear excess stock.

To strike a balance between value and trendy merchandise, Target recently launched its Dealworthy collection, offering nearly 400 everyday basics at affordable prices. Additionally, partnerships with designers like Kendra Scott and the introduction of appealing store-owned brands like Figmint have resonated well with shoppers.

In an effort to improve its loyalty programs, Target has made its free Target Circle program more user-friendly. Members will now see deals applied automatically at checkout, eliminating the need to search for or add individual offers. The Target RedCard credit card program has also been renamed Target Circle, making it easier for cardholders to access exclusive benefits such as an extra 5% discount and an extended return window.

When asked about competing against Amazon's Prime Membership, CEO Brian Cornell acknowledged that Target has a strong brand presence and the power of Target Circle to leverage. He emphasized that Target is not starting from scratch in this endeavor.

Target has reported a net income of $1.38 billion, or $2.98 per share, for the three-month period ending on Feb. 3, surpassing analysts' estimates. Revenue for the same period increased by 1.7% to $31.92 billion. Although traffic for both physical stores and online channels dropped by 1.7% during the quarter, it showed improvement from the 4.1% decline in the previous quarter.

Target's forecast for the current quarter anticipates a comparable sales decline of 3% to 5%. For the full year, Target expects no change to a 2% increase in comparable sales and adjusted earnings per share in the range of $8.60 to $9.60.

With the launch of Target Circle 360 and other strategic initiatives, Target aims to regain momentum and appeal to cautious consumers. The success of these efforts will be closely watched in the coming months.